Also in today’s edition: Covaxin expiry dates sow confusion, Sri Lanka is debt-trapped, No relief for Evergrande, Chips need men at work
The Twitter account of the Indian Medical Association was hacked late Sunday night. The hackers renamed the handle to Elon Musk and ran a cryptocurrency scam. This prank was similar to the one run from PM Narendra Modi’s account when it was hacked. The scamster managed to raise close to five bitcoins during the time it ran the hustle.
Btw, our podcast has been going strong for three months now. Tune in on your daily jog, drive to the office, or even as you WFH-ers have breakfast in bed. We promise it’ll be music to your ears.
The Market Signal
Stocks: Bulls seized the first day of trading of the new year, sending benchmark indices zooming. Sectorals Banking, Metals and IT led the charge. Sentiments were up on news that GST collections rose 13% in December year on year. Global cues are also encouraging as South Africa and the UK reported that Omicron surge might have levelled off.
Covaxin’s Crisis of Confidence
Confusion reigns as children aged 15 and above become eligible for Covid-19 shots. Reason? The opacity over expiry date extensions for Bharat Biotech’s Covaxin.
It began when a parent tweeted about expired Covaxin vaccines getting a life extension. The Drugs Controller General of India (DCGI), who heads the Central Drugs Standard Control Organisation (CDSCO), had approved the extension in late 2021. But the health ministry said vials shouldn’t be used past their mentioned expiry dates. This contradiction has led to raised brows.
Meanwhile, 3.78 million children were vaccinated on the first day.
Fine print: Extending vaccine shelf life isn’t problematic in itself. But as MJ Hegde, principal scientist at drugmaker GSK, points out, doing so requires strict protocols.
It’s unclear whether these protocols were adhered to.
Regulation with poor reputation? Even as the health ministry dismisses reports about expired Covaxin vials, the WHO has denied a shelf life extension for Covishield—almost a year after the DGCI greenlit the same for Indian adults.
The (Labour) Chips Are Down
The semiconductor industry can’t catch a break. As if a global chip shortage isn’t enough, the sector is now beset by labour shortages.
There’s a worldwide rush to meet the burgeoning demand for chips that power everything from electronics to automobiles. India, which harbours semiconductor dreams, is rolling out the red carpet for Intel, which in turn has foundry ambitions in Europe. Meanwhile, Taiwan Semiconductor Manufacturing Co (TSMC) and Samsung are doubling down on US manufacturing.
Look ma, no hands: But for all the doubling, tripling, or quadrupling down, chipset giants are bereft of the talent required to oversee any impending boom in manufacturing. Taiwan, the world leader in chip making, has a monthly shortfall of 27,700 semiconductor workers; this, despite salaries in the sector being at an all-time high.
What next? The labour shortfalls will affect the development and supply of complex semiconductors that are critical for next generation technologies.
Tesla Proves Its Trillion-dollar Worth
Elon Musk is an unusual entrepreneur who deftly uses innovative tech, top-notch talent and even his personal social media standing to keep Tesla delivering for investors. In 2021, when the auto industry was buffeted by pandemic headwinds, Tesla delivered 936,000 cars, 87% more than what it shipped in the previous year.
Outstanding quarter: It sold 308,600 cars in the December quarter of 2021 compared with 180,667 in the same period of 2020.
It’s business: Tesla has opened a showroom in China’s Xinjiang, a province the US says is bedevilled by human rights violations.
Market doffs its hat: The market rewarded the company handsomely, pushing its stock price up 50% during the year and sending its market value soaring above $1 trillion. That also made Musk the richest man on earth with a wealth of $270 billion.
Love him or hate him, Musk has been a savvy leader for Tesla, milking every opportunity to make money. Until last year, it made more money selling renewable energy credits (REC) to other automakers than selling its own cars. In the first quarter of 2021, a large chunk of its profits came from trading Bitcoins. Without crypto and REC gains, the car maker would have reported a $25 million loss in the March quarter.
When the pandemic hit chip supply, Tesla proved why software chops are as important to modern vehicle makers as machining skills. It maintained production by leveraging its deep industry relationships to source alternative chips and re-coded them on the fly to suit its vehicles.
Meanwhile, Musk used his clout on Twitter (68.6 million followers) to recruit top-notch talent. Head of the Autopilot team, Ashok Elluswamy, was the first to come through the micro-blogging site.
Evergrande Crisis Gets Worse
The world’s most indebted property developer, Evergrande has suspended trade in its shares in Hong Kong without revealing any details, but suggested that an “inside information” would come soon. Evergrande isn’t a stranger to these misadventures.
Evergrande had halted its shares in October 2021 too, as it tried to finalise the sale of a $2.6 billion stake in its property management unit.
Tell me more: This comes at a time when the company has been told to demolish its 39 residential buildings within 10 days in Hainan province as they were constructed illegally. The high-profile development project took eight years to complete and covers 435,000 square metres. Shares of the developer fell immediately after the news.
All this trouble when the developer is yet to clear $300 billion debts and has missed new coupon payments worth $255 million due last Tuesday.
Sri Lanka Faces Economic Ruin
Sri Lanka could go bankrupt this year. The island nation must repay loans worth $7.3 billion over 2022 but forex reserves are expected to dip to negative $437 million this month. It owes $6 billion to China alone.
Pandemic hit: Sri Lanka’s crisis is similar to Turkey’s where the lira lost 44% of its value against the dollar last year and pushed inflation up to 36% in December.
The crises in both countries have resulted in towering debt, hyperinflation and a humanitarian crisis although the reasons are different. Turkey suffered because of the bullheaded policy of President Tayyip Erdogan of not allowing the central bank to raise interest rates.
Policy blunder: Sri Lanka is heavily dependent on tourism and tea exports for forex. Both were badly hit by the pandemic. One blunder added to the woes. In May 2021, it banned fertilisers and pesticides, ostensibly to save forex and push organic farming. Many farms remained fallow. Others lost crops to weeds and pests. The policy was reversed in October last year but imported fertilisers were unaffordable.
Catching up: Lionel Messi is one of four PSG players to test positive for Covid-19. US Defense Secretary Lloyd Austin has contracted the disease with mild symptoms. Actor John Abraham and wife Priya Runchal are quarantining after testing positive for the virus.
Money drop: Former Myntra CEO Amar Nagaram's yet-to-be-named startup will reportedly raise $25 million-$30 million in its first funding round. It would make it a $100 million company.
New toys: Computers armed with M1 Pro and M1 Max chips, mobile phones, AirPods and potentially a virtual reality headset—Apple has a host of products lined up for 2022.
Relief: Close on the heels of South Africa saying the Omicron wave there was subsiding, the UK is reporting that its infections graph of the new variant is plateauing.
Game over: China has continued its suspension of new video game licenses until 2022. About 14,000 gaming-related firms have shut shop since July 2021.
Job jitters: Economic think tank CMIE says India's unemployment rate surged to 7.9% in December 2021, marking a four-month high since August 2021.
NFT on TV: Users can now browse, trade and display NFTs on Samsung's latest smart televisions.
Outta here: Polar bears are making Russia their home. Global warming has caused the temperatures to rise by 4.8°C in the last 50 years, forcing bears to look beyond Alaska. Russia’s Wrangel Island has seen an increased headcount—there were a record 747 bears in 2020, up from 589 in 2017.
Dampener: Sure, you swear by your tried and tested hangover potion, or a carb-rich breakfast after a binge drinking session. But researchers insist that there is no cure to deal with wine-flu the day after. For now, your best option is to rehydrate. Either that or give your evening tipple a skip.
Back to basics: Brick and mortar bookstores in China are primed for a comeback. But, with visually compelling aesthetics to woo young patrons. Call it nostalgia or FOMO, Chinese millennials have turned these into tourist hotspots. It is still unclear if they pick up a book to read.
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